M1 - Business Tax Intro Flashcards
What is the first penalty of a late filed tax return for individuals
£100 fine
What is the second penalty of a late filed tax return for individuals
£10 per day where the returns are more than 3 months late up until 6 months
What is the third penalty of a late filed tax return for individuals
5% of the liability or £300 (whichever greater) when overdue by 6 months
What is the fourth and final penalty of a late filed tax return for individuals
An additional 5% of the liability or £300 (whichever greater) when overdue by 12 months
What are the dates for making payments on account towards personal tax liability?
July 31 and January 31
what taxes are being paid in the payments of account for individuals?
income tax and national insurance
What classes of national insurance do self-employed people have to pay?
class 2 and 4
what is the qualifying threshold for not having to make the payments on account?
tax is less than £1,000 or less than 20% of total tax liability
when are capital gains tax and class 2 national insurance liabilities due?
January 31st
first penalty for late payment of personal tax
5% surcharge of unpaid tax after 30 days
second penalty for late payment of personal tax
Additional 5% surcharge after 6 months
third penalty for late payment of personal tax
Additional 5% surcharge after 12 months
What rate of interest is incurred on unpaid tax?
3.25% is due to HMRC, 0.5% if from HMRC
what does CAP stand for?
Chargeable Accounting Period
When does a CAP begin?
- The day after the previous CAP
- The day trade begins
- The day a company acquires a source of income
When does a CAP end?
The earliest of:
1. 12 months after it began
2. The end of the financial accounting period
3. The cessation of trade
4. The point that a company stops having income
5. The date the company goes into administration
What is the maximum duration of a CAP?
12 months
What is the maximum duration of a financial reporting period (period of account)?
18 months
Period of Account definition
the financial reporting period of year end
Financial year dates
1st April to 31st March
If a company is incorporated outside the UK, is it classed as UK resident?
Only if it is managed inside the UK
how long must a business’ records be kept after the CAP?
6 years
How long must an individual in business must keep records after the tax year?
5 years and 10 months
